Hello Guys, I have been going through CFA materials and I plan to take it on this June. I encountered with one of my finance professors today with whom I was taking finance elective class called “Financial management”. Since the Financial Management course required a perquisite class called “Accounting 101” he hesitated to sign me in for that class. ( I never took any accounting class since I am a mathematics major with economics minor) So i told him that “I am preparing for CFA exams so I think I would be able to manage it” and then he goes “Wait you are planning to CFA exams and you havent had any accounting background”. Then he started how tough it would be for me to pass CFA exams if i have no accounting background and basically he said I cant do it on my own. But I thought one can manage on your own to prepare for CFA exams. Am I getting something wrong over here or he is just scaring me here. Is Accounting section (Financial reporting and analysis) that bad for CFA level I that any student with no accounting background will have to go through a lot of struggling.
Many people pass the CFA exams with no accounting background.
No he’s totally wrong. The wording and terms used in L1 is very commonplace. And plus accounting 101 where you learn debits/credits/trial balance/journal garbage isn’t even on the CFA exams. Don’t worry about it.
FSA in Level 1 is quite basic and i don’t think you really need any accounting background to master it. I wouldn’t worry about it.
Thank you so much guys!
I took an accounting class in high school, so I was over prepared.
Well honestly the financial statement analysis portion of the exam can be pretty brutal, but it is less about accounting and more about understanding complex financial relationships. A number of CPAs I’ve known over the years thought they were all too cool for school and didn’t have to study FSA, and then FAIL.
I didn’t have accounting background and for me the FSA portion of Level I was the hardest portion out of all three exams. I felt as if I had to learn a new language. It took some time to get comfortable but the CFAI books provided sufficient background.
An accounting background will not hurt anyway, however you do not need an accounting background to pass the FRA L1. Like somebody pointed out, FRA is more about the complex relationships in financial statements and their associated impact on a firm. I dare say that a quantitative background is a better foundation than a pure accounting background for the CFA program. You will get to know this as you progress upwards in the CFA program. You do need a full dose of passion/energy, discipline, lots of hours spent going thru the materials/practicing questions over and over and nothing will sound unfamiliar again. With a strong sense of purpose of what it is you really want and be prepared to pay the price required of you; these will take you through any rigor in life no matter how challenging it may be even when the going gets tough. So, stop listening to people who say you can’t do whatever.
I had no accounting background and managed to pass it. I disliked that portion of the exam more than any other part, and probably suffered more while studying it than any other part too. But the test is large and everyone has sections that they struggle with. I would not be frightened off by not having an accounting background. Plenty of people pass without it. Just know that you’ll have to put in the time to learn that material and that people who have had that background will go through that part more easily.
accountants are anal retentive geeks who don’t know sh*t Also, both purealpha and Adison are 100% correct, i especially like adison’s philosophical take on FRA and life in general
You don’t know an accounting background, this is not an accounting test a.k.a. the CPA exam.
L1 is easy. L2 I would buy the accounting books and maybe do a quick run through during the fall to get familiar with the material. When I took a FAR seminar I talked to some CPA’s who said the L2 accounting was tougher than the CPA exam. That’s the one I would be worried about, but shouldn’t be too hard if you put the extra time in before you start studying for it.
Anything that is on the exam can be learned by somebody with 0 backround as long as you know everything that is in the study material
Accounting is not a pre-req, but it helps if you have some background. Accounting can be a strange animal if you are coming from a Math background because it’s based on a double-entry, debit-credit, classification system, unlike solving math equations. The CFA exam focuses more on relationships between the financial statements than rote accounting principles. The CFAI book provides a good substitute for Acctg 101, but plan on spending proportionately more time on this section.